Mastering Point Of Sale (POS) Reconciliation Across Multiple Systems: Your Essential Guide

There are a variety of point of sale (POS) systems on the market — in-store, kiosk, mobile, tablet, cloud, terminal, and multichannel, to name a few — and if you have more than one, you may find it challenging to master the process of financial reconciliation.

If you’ve been experiencing problems, such as different payment methods, mismatches between the POS and the processor, and split checks, this POS reconciliation guide is for you.

Cash vs. Credit POS Reconciliation

While cash and credit card reconciliation are similar in theory, there are some major differences. 

  • Cash reconciliation is the process of comparing financial records that were recorded in the POS to the physical amount of actual cash on hand at the end of a specific period (typically the end of the day or a shift). 
  • Credit card reconciliation is the process of comparing a company’s credit card transactions that are collected and processed against the sales posted in the POS system to accurately record revenue to the bank account.

Both are essential accounting processes that must be completed to balance revenue and accurately close the month.

Types of Reconciliation

In addition to the information from your POS and property management system, reconciliation also involves data from outside entities, the main three being banks, vendors, and customers. 

  • Bank reconciliation involves checking all POS transactions against bank records and statements in order to flag errors or issues. 
  • With vendor reconciliation, you compare vendor invoices for any products or services that you have received, ensuring that charges are accurate. 
  • Customer reconciliation entails comparing data in the POS with customer receipts to verify that all charges are correct.

Importance of POS Reconciliation

Even though point of sale reconciliation is a required task for any business that handles cash or credit cards in order to complete month-end close, there are additional benefits that will help ensure the financial stability of your business. 

  • Allows you to catch any errors as early as possible. It’s important to address mistakes or errors as soon as you find them so that they don’t become larger problems that can potentially impact your bottom line.
  • Flags unauthorized transactions. The projected global losses due to credit card fraud is expected to reach $43 billion by 2026, which means it’s more important than ever for companies to identify and flag any suspicious or unauthorized transactions. 
  • Helps prevent chargeback disputes. A chargeback is a charge that’s returned to a debit or credit card after a customer has successfully disputed a transaction. According to advice from Business.com, a company should never wait to fight a chargeback. If you do receive a chargeback, you will also receive a code that explains the reason for the dispute and the timeline for fighting the issue. 
  • Provides a clear picture of your company’s financial health. Accurate POS reconciliation allows you to closely monitor revenue and expenses, which provides insight into profitability, cash and credit card trends and patterns, and which areas may be most at risk.  
  • Illustrates which areas are top sellers or most popular. By analyzing sales data, you can monitor customer spending habits, see how certain products or services perform, and follow seasonal trends that can help with budget forecasting. 
  • Assists with inventory management. Managing expenses in the hospitality industry is no easy feat, but POS reconciliation allows you to compare sales data with your physical inventory so that you can accurately stock what you need. It also helps to predict seasonal inventory variations. 
  • Ensures guest satisfaction by avoiding billing errors and financial discrepancies. Did you know that it’s less expensive to retain customers than to acquire new ones? That’s why customer satisfaction is so important, and proper POS reconciliation can help by minimizing accounting errors that affect customer billing and allowing you to find and fix any related discrepancies in a timely manner. 

How Is POS Reconciliation Completed?

The process may vary slightly by business and POS system, but in general, these are the standard steps for POS reconciliation: 

  1. Collect data. Export the POS data and/or enter all receipt information into a spreadsheet.
  2. Match transactions. Compare credit card records with bank statements and other financial documents to ensure they align. For cash POS reconciliation, compare POS transactions with the physical amount of cash on hand.
  3. Identify discrepancies — Look for any mismatches, errors, red flags, or inconsistencies in the transaction records.
  4. Investigate and resolve issues. Analyze and resolve any discrepancies or errors found.
  5. Update records. After the reconciliation process is complete, adjust financial records to reflect the accurate transaction data. 
  6. Generate reports. Create detailed reports that summarize the reconciled credit card and cash transactions and then transfer the generated reports to the general ledger, which serves as the central repository for all financial transactions.

Efficiency in POS Reconciliation

Depending on your method and type of system, the POS reconciliation process can take hours (or even days), which is time that you’d likely rather spend on other responsibilities. The good news is that there are automated solutions that can easily integrate with your POS systems to not only expedite the process but also provide immediate alerts for discrepancies or potential fraud. Plus, manual reconciliation can often result in human error, which often adds additional time — not to mention a headache — to the process. 

Ideally, you want to reconcile each POS system at least once a week, and make sure that all information related to reconciliation is secure. Also, only authorized personnel who are up to date on training and compliance standards should be allowed to handle reconciliation. 

Looking to Take Your POS Reconciliation to the Next Level?

Total Recon is our automated, cloud-based solution that allows for easy customization so you can streamline operations and balance your day with automation. Total Recon – Credit Card Reconciliation and Total Recon – Cash Reconciliation both seamlessly integrate with your PMS/POS and provide a user-friendly interface so that you can efficiently automate and manage cash, credit card, and F&B covers reconciliation. Schedule a free demo today to see how it all works.